NC bill could mean higher rates, less oversight for millions of policy holders, commissioner says

RALEIGH, N.C. (WNCN) – North Carolina Insurance Commissioner Mike Causey warned state lawmakers Tuesday that a bipartisan proposal allowing Blue Cross Blue Shield of North Carolina to reorganize will "bad for the consumers."

Causey, a Republican, spoke at the House Health Committee, which discussed the measure for about 10 minutes before approving it in a divided vote.

The commissioner said he's concerned it will reduce transparency and could lead to higher premiums for policy holders.

"Blue Cross will be able to take these policy holder dollars that they've accumulated, move them wherever, to a holding company, shell company, with no oversight, no transparency, nobody's gonna know," he said.

The bill would allow Blue Cross NC, which is a not-for-profit entity that serves more than 4.3 million members, to create a holding company which it could move money into and allow greater flexibility to invest those funds and to compete with for-profit insurance companies, according to Rep. John Bradford (R-Mecklenburg).

The bill applies to so-called hospital service companies, of which there are two in North Carolina. Blue Cross is one of them, and Delta Dental is the other.

"In fact, other states have passed similar legislation, resulting in investment that has improved healthcare in their communities," said Rep. Bradford. "All I'll say is I've worked in really good faith with a lot of folks to get this bill to a place where everyone can live with. We know up here not everybody gets what they want."

Bradford noted the legislation has support from NC House Speaker Tim Moore (R-Cleveland). House Minority Leader Robert Reives (D-Chatham) stood alongside Rep. Bradford as he explained the bill.

"As soon as this money starts moving, you're going to see those health insurance rates go up," said Causey. "I may be the lone voice in the wilderness, but I just want to say this is not a good deal. And, I hope the legislators will listen to their constituents."

The North Carolina Justice Center led a coalition of groups in writing a letter urging Gov. Roy Cooper (D) to oppose the bill.

"This lack of transparency from a hyper-dominant corporation in North Carolina is unacceptable. Millions of North Carolinians are relying on you to prioritize their interests rather than those of a multibillion-dollar insurance company," they wrote in the letter.

In an email following Tuesday's committee, Blue Cross NC described Causey's and the Justice Center's concerns as "mischaracterizations."

"We support a bill that protects consumers, maintains a strong and solvent insurance company, and maintains appropriate oversight by state regulators. We want to maintain our unique not-for-profit mission and status and do not want to convert to a for-profit company," writes Sara Lang, a spokesperson for Blue Cross. "We take issue with Commissioner Causey and the NC Justice Center's mischaracterizations of this legislation and its impacts. We have engaged in good-faith discussions with stakeholders that have resulted in strengthened consumer protections, transparency and oversight. Blue Cross NC members deserve more than bureaucracy and burdensome regulations that make health care even more expensive."

Lawmakers who wanted to ask questions about the bill were not given the opportunity before the House Health Committee voted on it. Rep. Bradford said the bill likely will undergo further revisions Wednesday in the House Insurance Committee.

A spokesperson for Gov. Roy Cooper (D) indicated Tuesday there should be further changes to the bill.

"The goals should be comprehensive insurance coverage with access to health care in every area of the state at the lowest price, and the Governor encourages the legislature to improve this legislation in order to be in full alignment with those goals," writes Sam Chan, spokesperson for the governor.